Russia-linked cryptocurrency exchange Bitzlato, seized by Western law enforcement, plans to relaunch and allow partial withdrawals, a co-founder has announced. Members of the trading platform team also intend to relocate the business to the Russian Federation.
Co-founder says Exchange will provide access to user funds
Crypto exchange Bitzlato is taking steps to restore operations and immediately allow customers to withdraw bitcoin, one of its founders, Anton Shkurenko, said in a statement. interview with Satoshkin Live, a Youtube channel dedicated to crypto investing and trading, cited by leading Russian-language crypto news outlets Forklog and Bits.media.
In January, the Hong Kong-registered platform was taken down in an international law enforcement action described by US authorities as a “blow to crypto crime”. It allegedly handled $700 million in illicit funds received from criminal entities such as darknet market Hydra and Russian crypto Ponzi scheme Finiko.
Its other co-founder, Anatoly Legkodymov, who is a Russian national residing in China, was arrested in Miami and several other team members were detained in Europe. The service was interrupted with the involvement of French authorities who took control of its servers and decommissioned its website.
Shkurenko told Satoshkin’s host Dmitry Stepanin that French officers were able to seize Bitzlato’s hot wallet which at the time stored around 35% of users’ funds in various cryptocurrencies. He did not specify the exact amount but denied reports claiming the total exceeded $1 billion.
The executive also denied accusations that the company evaded tax and assured that it had always complied with EU know-your-customer and anti-money laundering regulations while cooperating with law enforcement to prevent illegal activities. He also expressed hope that the charges will soon be dropped and those arrested will be released.
Four Bitzlato employees were arrested with the involvement of Europol, and Shkurenko revealed their identities – former executive director Mikhail Lunev, marketing director Alexander Goncharenko, Pavel Lerner, a contractor working on the implementation of Monolithos DAO and a system administrator identified as Konstantin. The latter was released on bail in Cyprus.
Cryptocurrency exchange Bitzlato will move to Russia
Bitzlato is currently auditing its losses, the co-founder said and further disclosed that the company plans to move to Russia and renew its business under Russian jurisdiction. Right now, Bitzlato is looking for an infrastructure contractor, he said.
As for the return of user funds, Anton Shkurenko assured that customers will be able to withdraw 50% of the BTC in Bitzlato wallets on the day the platform is relaunched. Altcoin holdings will be released gradually, he added without specifying a timeline.
The world’s largest crypto exchange, Binance, which was one of the biggest recipients of Bitzlato, having apparently processed $346 million in funds from the platform, has blocked some Bitzlato user accounts in Eastern Europe. ‘East and in the Commonwealth of Independent States following the law enforcement operation. The major exchange later said it had restored access to most of those accounts.
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